Selling a manufacturing business you have spent years building is one of the most significant decisions you will make. The process is different from selling other businesses — the presence of plant and equipment, skilled staff and long-term customer relationships adds complexity, and the right buyer makes a significant difference to the outcome for everyone involved.
Serious buyers look for consistent revenue and earnings, a defensible customer base that isn't dependent on a single client, equipment in reasonable condition, and staff who will stay through a transition. They also look for a clear reason why the business can be improved under new ownership — better technology, additional capital, operational expertise or market expansion.
What buyers are rarely looking for: a business where all the key relationships sit with the owner personally, or where operations would stop without the founder present every day. If that describes your business, the time to fix it is before you go to market — not after.
Most small to mid-size manufacturing businesses are valued on a multiple of EBITDA (earnings before interest, tax, depreciation and amortisation). The multiple depends on the size, sector, consistency of earnings, quality of the customer base and growth outlook. In the Australian market, businesses in the $1M–$10M revenue range typically trade at 2.5 to 5 times EBITDA, with better-quality businesses at the higher end.
The value of plant and equipment is usually considered separately — either as part of the business value or as a separate asset sale component depending on the deal structure.
A typical process runs from initial confidential conversations through to settlement in three to six months. The key stages are: initial discussions and indicative valuation, non-disclosure agreement, due diligence, heads of agreement, legal documentation and settlement. At each stage, the process should move at a pace that is comfortable for the vendor.
Significantly. A financial buyer — such as a private equity firm — will typically focus on extracting value quickly and may restructure the business aggressively. An operator-buyer — someone who understands manufacturing and intends to run the business themselves — is more likely to retain staff, maintain customer relationships, and invest in the business's long-term capability.
FormFill Group is an operator-buyer. We are engineers who run manufacturing businesses ourselves. When we acquire a business, our goal is to make it better — applying IoT technology, process automation and operational expertise to grow its value over time.